2138.HK WACC - Weighted Average Cost of Capital

The WACC of Union Medical Healthcare Ltd (2138.HK) is 7.0%.

The Cost of Equity of Union Medical Healthcare Ltd (2138.HK) is 10.85%.

The Cost of Debt of Union Medical Healthcare Ltd (2138.HK) is 6.05%.

	Range	Selected
Cost of equity	8.60% - 13.10%	10.85%
Tax rate	14.70% - 15.40%	15.05%
Cost of debt	4.00% - 8.10%	6.05%
WACC	5.1% - 8.9%	7.0%

WACC

2138.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.96	1.33

Additional risk adjustments	0.0%	0.5%
Cost of equity	8.60%	13.10%

Tax rate	14.70%	15.40%
Debt/Equity ratio	2.11	2.11
Cost of debt	4.00%	8.10%

After-tax WACC	5.1%	8.9%


Selected WACC	7.0%

2138.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 2138.HK:

cost_of_equity (10.85%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.96) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.